SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or 14a-12
WESTWOOD ONE, INC.
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(Name of Registrant as Specified In Its Charter)
WESTWOOD ONE, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the Appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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pursuant to Exchange Act Rule 0-11; Set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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<PAGE>
Dear Shareholders:
Enclosed with this letter is a Proxy Statement and proxy card for the
Annual Meeting of Shareholders to be held on June 15, 2000 at 10:00 a.m.,
Pacific Time, in Studio 3 at W Los Angeles, 930 Hilgard Avenue, Los Angeles,
California. A copy of the Company's Annual Report on Form 10-K for the year
ended December 31, 1999, which report contains consolidated financial statements
and other information of interest with respect to the Company and its
shareholders, is also included with this mailing.
At the Annual Meeting, the holders of Common Stock, voting alone, will
elect two members of the Company's Board of Directors. Holders of Common Stock
and Class B Stock, voting together, will elect one member of the Company's Board
of Directors and to conduct such other business as may properly come before the
meeting.
IT IS IMPORTANT THAT YOU MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE PROVIDED POSTAGE-PAID ENVELOPE IF YOU DO NOT INTEND TO BE PRESENT AT
THE MEETING. IF YOU DO LATER DECIDE TO ATTEND, YOUR PROXY WILL AUTOMATICALLY BE
REVOKED IF YOU VOTE IN PERSON. ACCORDINGLY, YOU ARE URGED TO MARK, SIGN, DATE
AND RETURN THE PROXY CARD NOW IN ORDER TO ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
We appreciate your continued support.
Sincerely,
WESTWOOD ONE, INC.
Norman J. Pattiz
Chairman of the Board
April 28, 2000
<PAGE>
WESTWOOD ONE, INC.
40 West 57th Street, 5th Floor
New York, NY 10019
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on
June 15, 2000
To Our Shareholders:
The Annual Meeting of the Shareholders of Westwood One, Inc. (the
"Company") will be held in Studio 3 at W Los Angeles, 930 Hilgard Avenue, Los
Angeles, California, on June 15, 2000 at 10:00 a.m., Pacific Time, for the
following purposes:
(1) To elect three members of the Company's Board of Directors;
(2) To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending
December 31, 2000; and
(3) To consider and act upon such other business as may properly come
before the meeting.
Shareholders of record at the close of business on May 12, 2000 will be
entitled to notice of and to vote at the Annual Meeting, and a list of such
shareholders will be available for examination during ordinary business hours at
least ten days prior to the Annual Meeting by any shareholder, for any purpose
germane to the Annual Meeting, at the Company's offices at 9540 Washington
Boulevard, Culver City, California 90232 (telephone (310) 204-5000).
Whether or not you intend to be present at the meeting, please date, sign
and mail the enclosed proxy in the provided postage-paid envelope as promptly as
possible. You are cordially invited to attend the Annual Meeting and your proxy
will be revoked if you are present and vote in person.
By Order of the Board of Directors
Farid Suleman
Secretary
April 28, 2000
<PAGE>
WESTWOOD ONE, INC.
40 West 57th Street, 5th Floor
New York, NY 10019
----------------------
PROXY STATEMENT
----------------------
This Proxy Statement (first mailed to shareholders on or about May 17,
2000) is furnished in connection with the solicitation of proxies by the
management of Westwood One, Inc., a Delaware corporation (the "Company"), for
use at the Annual Meeting of Shareholders of the Company to be held on June 15,
2000 at 10:00 a.m., Pacific Time, in Studio 3 at W Los Angeles, 930 Hilgard
Avenue, Los Angeles, California, and any adjournments thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders.
Holders of record of the Common Stock and Class B Stock at the close of
business on May 12, 2000 are entitled to vote at the Annual Meeting. As of the
close of business on April 14, 2000, 111,579,518 shares of Common Stock,
excluding treasury shares, and 703,466 shares of Class B Stock were issued and
outstanding.
Each holder of outstanding Common Stock is entitled to cast one (1) vote
for each share of Common Stock held by such holder. Each holder of Class B Stock
is entitled to cast fifty (50) votes for each share of Class B stock held by
such holder. Only the Common Stock is publicly traded. Holders of Common Stock,
voting alone, will elect two members of the Company's Board of Directors.
Holders of Common Stock and Class B Stock, voting together, will elect one
member of the Company's Board of Directors, and conduct such other business as
may properly come before the meeting.
A majority of the outstanding votes entitled to be cast at the Annual
Meeting and represented in person or by proxy will constitute a quorum. With
regard to the election of directors and any other proposal submitted to a vote,
approval requires the affirmative vote of a majority of the votes entitled to be
cast and represented in person or by proxy at the meeting. Where a choice is
specified on the proxy as to the vote on any matter to come before the meeting,
the proxy will be voted in accordance with such specification. If no
specification is made, but the proxy is properly signed, the shares represented
thereby will be voted in favor of the director nominees and for the ratification
of Pricewaterhousecoopers LLP. Management is not aware of any matters, other
than those specified above, that will be presented for action at the Annual
Meeting, but if any other matters do properly come before the meeting, the
proxies will vote upon such matters in accordance with their best judgment.
Shares represented by proxies which are marked "abstain", "withhold
authorization" or to deny discretionary authority on any matter will be counted
as shares present for purposes of determining the presence of a quorum; such
shares will also be treated as shares present and entitled to vote, which will
have the same effect as a vote against any such matter. Proxies relating to
"street name" shares which are not voted by brokers on one or more matters will
not be treated as shares present for purposes of determining the presence of a
quorum unless they are voted by the broker on at least one matter. Such
non-voted shares will not be treated as shares represented at the meeting as to
any matter for which non-vote is indicated on the broker's proxy.
Any shareholder submitting the accompanying proxy card has the right to
revoke it by notifying the Secretary of the Company in writing at any time prior
to the voting of the proxy, or by signing and delivering to the Secretary a
later-dated proxy. A proxy will be automatically revoked if the person giving
the proxy attends the Annual Meeting and votes in person.
The Company's Annual Report on Form 10-K for the year ended December 31,
1999, including consolidated financial statements and other information,
accompanies this Proxy Statement but does not form a part of the proxy
soliciting material.
1
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes (Class I, II, and
III), each class serving for three-year terms, which terms do not coincide. The
Board of Directors currently is comprised of eleven individuals. However, the
Company's Bylaws have been amended to increase the size of the Board of
Directors to thirteen. When such vacancies are filled, one additional director
will be a Class I Independent director and the other additional director will be
a Class II director. Only one class of directors is elected at each Annual
Meeting. Of the directors, at least 331/3% must be independent outside
directors. Pursuant to the Company's Certificate of Incorporation, holders of
Common Stock, voting alone, have the right to elect 20% of the Board of
Directors, which is currently three directors. However, it is currently intended
that the holders of the Common Stock will vote alone to elect all the
Independent directors, at least one of which will be elected each year, as set
forth below. The remaining members of the Board are elected by all shareholders
voting together as a single class.
In connection with the merger of Metro Networks, Inc. ("Metro") with the
Company on September 22, 1999, Mr. Saperstein entered into a voting agreement
with Infinity Broadcasting Corporation ("Infinity") pursuant to which each of
them agreed, subject to any applicable laws or regulations of the stock exchange
on which shares of the Company's Common Stock are listed, to vote all shares of
the Company's capital stock held by it or him for the election of the other's
designees to the Company's Board of Directors. Mr. Saperstein has one designee.
At the Annual Meeting, holders of Common Stock, voting alone, will elect
the Independent Class II directors, and holders of Common Stock and Class B
Stock, voting together, will elect the other Class II director, for three-year
terms, until their successors are elected and qualified. The Board of Directors
intends to nominate David L. Dennis and Maria D. Hummer (the Independent
directors) and Farid Suleman to serve for three-year terms ending in 2003.
Messrs. Dennis and Suleman and Mrs. Hummer currently serve as Class II directors
of the Company. Unless otherwise indicated on any proxy, the persons named as
proxy voters on the enclosed proxy card intend to vote the stock represented by
each proxy to elect these nominees. The nominees are willing to serve as
directors, but should any or all refuse to or be unable to serve, the management
proxy holders will vote for one or more other persons nominated by the Board of
Directors. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO ELECT
MESSRS. DENNIS AND SULEMAN AND MRS. HUMMER AS DIRECTORS OF THE COMPANY.
The continuing directors and nominees for director of the Company are:
Director Term
Name Age Since Class Expires
---- --- ----- ----- -------
Norman J. Pattiz 57 1974 I 2001
Mel Karmazin 56 1994 I 2001
Joseph B. Smith (Independent) 72 1994 I 2001
Dennis F. Holt 63 1999 I 2001
Farid Suleman 48 1994 II 2000
David L. Dennis (Independent) 51 1994 II 2000
Maria D. Hummer (Independent) 55 2000 II 2000
Gerald Greenberg (Independent) 57 1994 III 2002
Steven A. Lerman 53 1995 III 2002
Joel Hollander 44 1999 III 2002
David I. Saperstein 59 1999 III 2002
The principal occupations of the three director nominees and each of the
other eight continuing directors are as follows:
Mr. Pattiz - founded the Company in 1974 and has held the position of
Chairman of the Board since that time. He was also the Company's Chief Executive
Officer until February 3, 1994. Mr. Pattiz is Chairman of the Board of Directors
of InterPacket Networks and is on the Board of Directors of eAngeles and
Studiox2.com. Mr. Pattiz is also a member of the executive board of the
Broadcast Education Association, a trustee of the Museum of Television & Radio
and the Hollywood Radio and Television Society and serves on the Communications
Board of UCLA.
2
<PAGE>
Mr. Karmazin - has been a director of the Company since February 3, 1994.
Mr. Karmazin was also President and Chief Executive Officer of the Company from
February 3, 1994 until October 8, 1998. Mr. Karmazin was elected the chief
executive officer of CBS Corporation ("CBS") in January 1999, having served as
president and chief operating officer of CBS since April 1998, and Chairman,
President and Chief Executive Officer of Infinity since September 1998. Mr.
Karmazin joined CBS in December 1996 as chairman and chief executive officer of
CBS Radio. In May 1997, he also assumed responsibility for CBS's owned
television stations and became chairman and chief executive officer of the CBS
Station Group. Prior to joining CBS, he was president and chief executive
officer of Infinity Broadcasting Corporation from 1981 until its acquisition by
CBS in December 1996. He has been a director of CBS since 1997. Mr. Karmazin is
a director of the New York Stock Exchange and a member of the Board of Trustees
for the Museum of Television and Radio.
Mr. Smith - has been a director of the Company since May 24, 1994. He was
previously a director of the Company from February 1984 until February 3, 1994.
Since April 1993, Mr. Smith has been the President of Unison Productions, Inc.,
through which he serves as an industry consultant involved in a number of
projects in the entertainment business.
Mr. Holt - was appointed to the Board of Directors of the Company on
September 22, 1999. Mr. Holt was a director of Metro from October 1996 through
September 22, 1999. Mr. Holt has been the Chairman and Founder of Initiative
Media (formerly Western International Media Corporation) since founding the
company in 1969. Initiative Media is the largest media-buying organization in
the United States. Mr. Holt serves as a member of Skull and Dagger, Blue Key,
the Silver Shield Foundation, the Board of Counselors for the University of
Southern California School ("USC") of Public Administration; the Board of
Directors of St. John's Hospital, the SKIRBALL Cultural Center, the John Douglas
French Alzheimer's Foundation and the USC Annenberg School for Communication.
Mr. Holt is an associate of the California Institute of Technology. Mr. Holt was
also awarded the Horatio Alger Association award in 1998.
Mr. Suleman - has been the Executive Vice President, Chief Financial
Officer, Secretary and a director of the Company since February 1994. He has
been Executive Vice President, Chief Financial Officer, Treasurer and a director
of Infinity since September 1998. Mr. Suleman has been the Senior Vice
President, Finance of CBS since August 1998. He also has served as Senior Vice
President and Chief Financial Officer of the CBS Station Group since June 1997.
From January 1997 to June 1997, he served as Senior Vice President and Chief
Financial Officer of CBS Radio. From 1986 until its acquisition by CBS in
December 1996, Mr. Suleman was Vice President, Finance, Chief Financial Officer
and a director of Infinity.
Mr. Dennis - has been a director of the Company since May 24, 1994. Mr.
Dennis has served as Vice Chairman, Office of the President, Chief Corporate
Officer and Chief Financial Officer of Tenet Healthcare, a hospital owner and
healthcare provider, since March 2000. Mr. Dennis served as Managing Director,
Investment Banking for Donaldson, Lufkin & Jenrette Securities Corporation from
April 1989 to February 2000. Mr. Dennis is also a director of iFuse, Inc. an
internet company focused on generation Y.
Mrs. Hummer - has been a director of the Company since March 29, 2000. Mrs.
Hummer has been Counsel to Manatt, Phelps & Phillips, LLP ("Manatt, Phelps"), a
law firm with offices in Los Angeles, Menlo Park, Nashville and Washington D.C.,
since January 1999. Prior to January 1999 Mrs. Hummer was a partner with Manatt,
Phelps holding the positions of Chairman of the Management Committee and
Co-Managing Partner. Mrs. Hummer is currently on the Boards of Trustees, CNI
Charter Funds; Board of Directors, Los Angeles World Affairs Counsel; Board of
Directors, The Music Center/Performing Arts Center of Los Angeles County; Board
of Directors, Independent Colleges of Southern California; Board of Trustees,
Scripps College; Board of Trustees, UCLA/Armand Hammer Museum of Art and
Cultural Center; Board of Trustess, Mount St. Mary's College; Woman's
Leaderships Board of John F. Kennedy School of Government-Harvard University;
Board of Directors, Children's Institute International; and Board of Directors,
The Regency Club. Mrs. Hummer is also a member of The Committee of 200 and the
National Women's Forum.
Mr. Greenberg - has been a director of the Company since May 24, 1994.
Since April 1993, Mr. Greenberg has served as President of MJJ Music, a Michael
Jackson/Sony owned record label.
Mr. Lerman - has been a director of the Company since April 19, 1995. Since
1986, Mr. Lerman has been a member of the Washington, D.C. law firm of
Leventhal, Senter and Lerman, PLLC. Mr. Lerman was a director of Infinity from
February 1992 through December 1996. Mr. Lerman is a member of the Mid-Atlantic
Regional Advisory Board of the University of Pennsylvania.
3
<PAGE>
Mr. Hollander - has been a director of the Company since September 22, 1999
and the Company's President and Chief Executive Officer since October 8, 1998.
Mr. Hollander was Vice President and General Manager of Infinity's New York
radio station WFAN from April 1992 to October 1998. Mr. Hollander is Chairman of
the CJ Foundation for SIDS and a member of the Board of Directors of Tomorrow's
Children Fund and the CBS Foundation.
Mr. Saperstein - was appointed to the Board of Directors of the Company on
September 22, 1999. Mr. Saperstein founded Metro in 1978. From 1978 to September
1999, Mr. Saperstein was the Chief Executive Officer and a director of Metro.
Mr. Saperstein served as President of Metro from 1978 through June 1996. Mr.
Saperstein serves on the Board of Directors for the Toxoplasmosis Research
Institute of the Michael Reese Hospital in Chicago; the Board of Trustees for
the Houston chapter of the United Way; the Boards of Governors for the Music
Center of Los Angeles County and the Cedars-Sinai Medical Center in Los Angeles
and is a member of the Dean's Advisory Council for Touro College of Law in New
York.
Committees of the Board
- -----------------------
The Board of Directors has a Compensation Committee which currently
consists of Messrs. Greenberg, Dennis and Smith. The Compensation Committee
administers the Company's Stock Incentive Plan, and is authorized to approve,
and may negotiate, employment arrangements with key executives of the Company
and its subsidiaries. There was one formal meeting of the Compensation
Committee, and Committee members engaged in informal discussions and took
several actions by written consent during fiscal 1999.
The Board of Directors also has an Audit Committee which currently
consists of Messrs. Dennis and Lerman, as well as Mr. Paul Krasnow who will not
stand for re-election to the Board when his term expires at the Annual Meeting
on June 15, 2000. The Audit Committee is authorized to review the Company's
financial statements, meet with the Company's auditors and make recommendations
to the Board of Directors about internal accounting controls and procedures.
There were two meetings of the Audit Committee during fiscal 1999.
The Board of Directors has a Nominating Committee, currently consisting of
Messrs. Pattiz, Karmazin and Dennis, which makes nominations for directors each
year. There were no formal meetings of the Nominating Committee in fiscal 1999.
Director Attendance and Compensation
- ------------------------------------
In fiscal 1999 the Board as a whole met on six occasions. During fiscal
1999, each of the current directors then in office attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings of committees of the Board of Directors on which such
director served.
Directors of the Company who are not officers received $3,750 per meeting
attended for their services as directors and $1,875 per meeting attended for
their services as committee members. In addition, all directors who are not
officers receive a mandatory grant of stock options to acquire 10,000 shares of
Common Stock each year. Directors are also reimbursed for expenses incurred in
attending such meetings. During fiscal 1999, Messrs. Smith, Dennis, Lerman and
Greenberg received $28,125, $37,500, $31,875 and $31,875, respectively, in Board
and Board committee fees. In 1999, in addition to the mandatory grant of stocks
option which was made on September 30, 1999, the Compensation Committee of the
Board of Directors authorized a grant of 20,000 shares of Common Stock to the
following current Board members: Messrs. Pattiz, Dennis, Greenberg, Karmazin,
Krasnow, Lerman and Smith.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of April 14, 2000, the number and
percentage of outstanding shares of Common Stock and Class B Stock held by: (1)
each person or group known to the Company to beneficially own more than five
percent of the outstanding Common Stock or Class B Stock of the Company; (2)
each of the three director nominees and each of the other nine current
directors; (3) the Named Executive Officers (see "EXECUTIVE COMPENSATION"
appearing elsewhere in this report); and (4) all current directors and executive
officers as a group. At April 14, 2000, there were 111,579,518 shares of Common
Stock outstanding, excluding treasury shares, and 703,466 shares of Class B
Stock outstanding.
4
<PAGE>
Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended, (the "Exchange Act").
Under this Rule, certain shares may be deemed to be beneficially owned by more
than one person (such as where persons share voting power or investment power).
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is provided; in
computing the percentage of ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights. As a
result, the percentage of outstanding shares of any person as shown in the
following table does not necessarily reflect the person's actual voting power at
any particular date.
<TABLE>
<CAPTION>
Shares of Common Stock Shares of Class B Stock
Beneficially Owned (1) Beneficially Owned (1)
---------------------- ----------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Infinity Network, Inc., a subsidiary of Infinity
Broadcasting Corp. (14) 20,000,000 (12) 17.3% - -
40 West 57th Street
New York, NY 10019
Putnam Investments, Inc. (14)
One Post Office Square 11,228,312 (13) 10.1% - -
Boston, MA 02109
David I. Saperstein 14,153,414 (9) 12.6% - -
9601 Wilshire Blvd., Suite 730
Beverly Hills, CA 90210
Norman J. Pattiz (2) 1,019,680 (3) * 703,380 99.9%
Mel Karmazin 1,700,298 (4) 1.5% - -
Joel Hollander 104,200 (7) * - -
Farid Suleman 820,000 (8) * - -
Joseph B. Smith 20,000 (8) * - -
Gerald Greenberg - * - -
David L. Dennis 78,710 (5) * - -
Dennis F. Holt 240,000 (10) * - -
Maria D. Hummer - * - -
Paul G. Krasnow 136,000 (6) * - -
Steven A. Lerman 52,000 (8) * - -
All current directors and executive officers as
a group (12 persons) 18,324,302 (11) 15.9% 703,380 99.9%
</TABLE>
- ------------------------
* Represents less than one percent (1%) of the Company's outstanding shares of
Common Stock.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock and Class B Stock, unless otherwise
indicated.
(2) As of April 14, 2000, Mr. Pattiz, whose business address is 9540 Washington
Boulevard, Culver City, California 90232, owned Common Stock and Class B Stock
representing approximately 24.3% of the total voting power of the Company.
(3) Includes stock options for 544,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan.
(4) Includes stock options for 1,296,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan.
(5) Includes stock options for 52,000 shares granted under the Company's Amended
1989 Stock Incentive Plan or Amended 1999 Stock Incentive Plan.
(6) Includes stock options for 16,000 shares granted under the Company's Amended
1989 Stock Incentive Plan or Amended 1999 Stock Incentive Plan.
(7) Includes stock options for 100,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan.
5
<PAGE>
(8) Represents stock options granted under the Company's Amended 1989
Stock Incentive Plan or Amended 1999 Stock Incentive Plan.
(9) Includes stock options for 599,998 shares granted by Metro prior to its
merger with the Company on September 22, 1999. Does not include shares
held by certain trusts created for the benefit of Mr. Saperstein's
children, beneficial ownership of which Mr. Saperstein disclaims.
(10) Includes stock options for 90,000 shares granted by Metro prior to
its merger with the Company on September 22, 1999.
(11) Includes stock options for 3,589,998 shares granted under the
Company's Amended 1989 Stock Incentive Plan or Amended 1999 Stock
Incentive Plan.
(12) Includes 4,000,000 shares which may currently be acquired upon exercise
of warrants at an exercise prices ranging between $10.00 and $12.50 per
share.
(13) Putnam Investments, Inc. as an investment advisor has no sole voting
or dispositive power, but has shared dispositive power for 11,228,312
shares and shared voting power for 138,100 of such shares.
(14) Tabular information and footnotes 12 and 13 are based upon information
contained in the most recent Schedule 13G filings and other information
made available to the Company.
EXECUTIVE OFFICERS
The names, ages and principal occupations (if not set out previously) of
the current executive officers of the Company and its subsidiaries are as
follows:
Name Age Position
---- --- --------
Norman J. Pattiz 57 Chairman of the Board
Joel Hollander 44 President and Chief Executive Officer
Farid Suleman 48 Executive Vice President, Chief
Financial Officer, Secretary and
Director
Messrs. Hollander and Suleman serve under a Management Agreement which is
discussed in the following paragraph. Mr. Pattiz has a written employment
agreement with the Company which expires on November 30, 2003.
Pursuant to the terms of the Management Agreement between the Company and
Infinity which expires on March 31, 2004, Infinity manages the business and
operations of the Company, subject to the direction and supervision of the Board
of Directors, for a base management fee of $2,500,000, an incentive bonus based
upon the Company exceeding predetermined cash flow objectives, and warrants
(4,000,000 shares of Common Stock exercisable after the Common Stock reaches
certain market prices per share). Infinity owns 16,000,000 shares of Common
Stock and currently beneficially owns approximately 17.3% of the Common Stock of
the Company (see "PRINCIPAL SHAREHOLDERS" appearing elsewhere in this report).
EXECUTIVE COMPENSATION
Disclosure regarding compensation is provided for each of the executive
officers of the Company (collectively, the "Named Executive Officers") who
served as executive officers at the end of or during the fiscal year ended
December 31, 1999:
Norman J. Pattiz..... The Company's Chairman of the Board at December 31, 1999.
Joel Hollander....... The Company's Chief Executive Officer and President at
December 31, 1999.
Farid Suleman........ The Company's Executive Vice President and Chief Financial
Officer at December 31, 1999.
6
<PAGE>
Compensation Committee Report
- -----------------------------
The Compensation Committee of the Company's Board of Directors consists of
at least two independent, outside directors; currently Messrs. Greenberg, Dennis
and Smith serve on the Committee.
The Compensation Committee administers the Company's Stock Incentive Plan
and may review employment arrangements with executive officers of the Company
other than Messrs. Hollander and Suleman who serve as the Company's President
and Chief Executive Officer and Chief Financial Officer, respectively, pursuant
to the Management Agreement described above. (See "EXECUTIVE OFFICERS" appearing
elsewhere in this report for a more detailed description of the Management
Agreement.)
Under the terms of the Management Agreement, pursuant to which Mr.
Hollander serves as the Company's President and Chief Executive Officer, and Mr.
Suleman serves as the Company's Chief Financial Officer, the Company pays a
management fee to Infinity. Accordingly, the Compensation Committee does not set
the base salaries or annual cash bonus incentives of Messrs. Hollander or
Suleman, but does have the authority to grant stock incentives to such officers.
The compensation policies utilized by the Compensation Committee and the
Chief Executive Officer are intended to enable the Company to attract, retain
and motivate executive officers to meet Company goals using appropriate
combinations of base salary and incentive compensation in the form of annual
cash bonuses and stock incentives. Generally, compensation decisions are based
on contractual commitments, as well as corporate performance, the level of
individual responsibility of the particular executive and individual
performance. The foregoing factors are listed in order of their relative
importance in making compensation decisions.
Stock incentives have been granted under the Amended 1989 and 1999 Stock
Incentive Plans by the Compensation Committee, at its sole discretion, to
officers and employees of the Company to reward outstanding performance during
the prior fiscal year and as an incentive to continued outstanding performance
in future years. In evaluating the performance of officers and employees other
than the Chief Executive Officer, the Compensation Committee consults with the
Chief Executive Officer and others in management, as applicable. In evaluating
the performance of the Chief Executive Officer, the Compensation Committee may
consult with the entire Board of Directors. In an effort to attract and retain
highly qualified officers and employees, stock incentives may also be granted by
the Compensation Committee, at its sole discretion, to newly hired officers and
employees as an inducement to accept employment with the Company.
1999 Compensation for Executive Officers
- ----------------------------------------
Salary paid to Mr. Pattiz for 1999 was based on the terms of his 1998
employment agreement with the Company, which expires on November 30, 2003.
The Compensation Committee
Gerald Greenberg, Chairman of the Compensation Committee
David L. Dennis
Joseph B. Smith
7
<PAGE>
Summary Compensation Table
The following table sets forth the compensation received by the Named
Executive Officers for the years ending December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
---------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
Securities
Name and Fiscal Other Annual Underlying All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Options (#) Compensation ($)
- ------------------ ---- ---------- --------- ---------------- ----------- ----------------
(1)
Norman J. Pattiz 1999 $500,000 -- -- 20,000 --
Chairman of the Board 1998 729,167 -- -- 1,000,000 --
1997 750,000 -- -- -- --
Joel Hollander 1999 -- -- -- 100,000 --
Chief Executive Officer 1998 -- -- -- 500,000 --
and President (2)
Farid Suleman 1999 -- -- -- 400,000 --
Chief Financial 1998 -- -- -- -- --
Officer (2) 1997 -- -- -- 400,000 --
</TABLE>
- ---------------------------------------
(1) This column includes the aggregate cost to the Company (if such amount
exceeded the lesser of $50,000 or 10% of such officer's salary and bonus) of
providing various prerequisites and other personal benefits.
(2) Mr. Suleman assumed his position effective February 3, 1994. Mr. Hollander
assumed his position effective October 8, 1998, pursuant to the terms of the
Management Agreement between the Company and Infinity. Messrs. Hollander and
Suleman do not receive any cash compensation from the Company. All compensation
under the Management Agreement is paid to Infinity. See "Certain Relationships
and Transactions." Mr. Hollander was granted 500,000 options to purchase Common
Stock in 1998 and 100,000 options in 1999, while Mr. Suleman was granted 400,000
options in 1997 and 400,000 options in 1999.
8
<PAGE>
The following two tables provide information on stock option grants
made to the Named Executive Officers in 1999, options exercised during 1999 and
options outstanding on December 31, 1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1999
Individual Grants
----------------------------------------------------------
Potential Realizable Value
Number of % of Total at Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise or Option Term
Options Employees in Base Price Expiration ----------------------
Name Granted (#) (4) Fiscal Year (3) ($/Share) Date 5% ($) 10% ($)
---- ----------- --------------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Norman J. Pattiz 20,000 (1) 0.9% $12.69 03/10/09 $ 160,000 $ 404,000
Joel Hollander 100,000 (2) 4.7% 19.29 10/18/09 1,215,000 3,067,000
Farid Suleman 400,000 (1) 19.0% 12.69 03/10/09 3,198,000 8,071,000
</TABLE>
(1) These options were granted under the Amended 1989 Stock Incentive Plan on
March 10, 1999 and become exercisable 20% per year on each anniversary date
between 2000 and 2004.
(2) These options were granted under the Amended 1999 Stock Incentive Plan on
October 18, 1999 and become exercisable 20% per year on each anniversary
date between 2000 and 2004.
(3) Percentage calculations exclude the impact of a mandatory grant of 100,000
options at $22.57 per share on September 30, 1999 to outside directors
(20,000 each to Messrs. Dennis, Greenberg, Krasnow, Lerman and Smith)
which, in accordance with the terms of the Amended 1989 Stock Incentive
Plan, become exercisable 20% per year on each September 30 between 2000 and
2004.
(4) The number of Options and Exercise Prices have been adjusted to reflect the
two-for-one stock split which was paid to shareholders on March 22, 2000.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1999
AND FISCAL YEAR END OPTION VALUES
Number of Securities
Underlying Value of Unexercised,
Unexercised Options In-the-Money Options
at Fiscal Year End (#) at Fiscal Year End ($)
Shares Acquired Value ---------------------------- ----------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Norman J. Pattiz - - 340,000 820,000 $ 9,729,000 $19,650,000
Joel Hollander - - 100,000 500,000 2,984,000 13,807,000
Farid Suleman - - 740,000 560,000 23,489,000 14,743,000
</TABLE>
- ---------------------
(1) The number of Securities have been adjusted to reflect the two-for-one
stock split which was paid to shareholders on March 22, 2000.
(2) On December 31, 1999, the closing per share price for the Company's Common
Stock on the New York Stock Exchange was $38 as adjusted for the
two-for-one stock split which was paid to shareholders on March 22, 2000.
9
<PAGE>
Performance Graph
The performance graph below compares the performance of the Company's
Common Stock to the Dow Jones Equity Market Index and the Dow Jones Media
Industry Index for the Company's last five calendar years. The graph assumes
that $100 was invested in the Company's Common Stock and each index on December
31, 1993.
Measurement Dow Jones Dow Jones
Period Equity Media
(last business day Westwood Market Industry
of calendar year) One, Inc. Index Index
- ------------------ --------- ----- -----
1994 100 100 100
1995 145 138 129
1996 171 169 133
1997 381 227 209
1998 313 292 279
1999 390 351 446
The following table sets forth the closing price of the Company's Common
Stock at the end of each of the last five calendar years.
Base Year
1994 1995 1996 1997 1998 1999
- ---- ---- ---- ---- ---- ----
$4 7/8 $7 1/16 $8 5/16 $18 9/16 $15 1/4 $38
====== ======= ======= ======== ======= ===
10
<PAGE>
Employment Agreements
- ---------------------
The Company has a written employment agreement with Mr. Pattiz, effective
April 29, 1998, pursuant to which Mr. Pattiz is to serve as Chairman of the
Board of the Company for a five-year term ending November 30, 2003 at an annual
salary of $500,000. The agreement also granted Mr. Pattiz ten-year options to
acquire 1,000,000 shares of Common Stock under the Amended 1989 Stock Incentive
Plan (which vest at the rate of 200,000 shares per year over the five-year term
of the employment agreement) and provides additional benefits which are standard
for executives in the industry. The agreement generally will be terminable by
Mr. Pattiz upon ninety days' written notice to the Company; it will be
terminable by the Company only in the event of death, permanent and total
disability, or for "cause." In the event of permanent and total disability, Mr.
Pattiz will receive his base salary for the following twelve months and 75% of
his base salary for the remainder of the term of the agreement. In the event of
a "change of control," as defined in the agreement, any unvested options granted
pursuant to this agreement will become immediately exercisable and Mr. Pattiz
will continue to receive any base compensation he would have otherwise been
entitled to receive for the remaining term of the agreement. In addition, Mr.
Pattiz has full "piggy back registration rights" and limited demand registration
rights with respect to any and all of the Common Stock owned by Mr. Pattiz.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The current members of the Compensation Committee, Messrs. Smith and
Greenberg, have served on the Committee since May 24, 1994, and Mr. Dennis has
served on the Committee since June 17, 1997.
Mr. Hollander, The Company's President and Chief Executive Officer, was
responsible for determining the salary and cash flow objectives that would
result in bonuses being paid to executive officers (other than Mr. Pattiz whose
salary was based on the terms of his employment agreement). (See "Employment
Agreements" and "Compensation Committee Report" appearing elsewhere in this
report.)
Mr. Dennis was a Managing Director, Investment Banking of Donaldson, Lufkin
& Jenrette Securities Corporation ("DLJ") in 1999. During 1999, the Company used
DLJ as its investment advisor in conjunction with its merger with Metro
Networks, paying DLJ $1,085,000 for its services.
Certain Relationships and Transactions
- --------------------------------------
Messrs. Karmazin, Hollander and Suleman are officers or employees of
Infinity which beneficially owns 17.3% of the Common Stock of the Company (see
"PRINCIPAL SHAREHOLDERS" appearing elsewhere in this report). Infinity manages
the business and operations of the Company pursuant to the terms of a Management
Agreement between the Company and Infinity (as discussed under "EXECUTIVE
OFFICERS" appearing elsewhere in this report), under which the Company paid or
accrued expenses aggregating approximately $3,613,000 during fiscal 1999.
On March 31, 1999, the Company renewed its representation and management
agreement (the "Representation Agreement") with CBS, Inc. to operate the CBS
Radio Networks for an additional five years. The Company retains all revenue and
is responsible for all expenses of the CBS Radio Networks. CBS, Inc. also owns
approximately 65% of the equity of Infinity. In addition, a number of Infinity's
radio stations are affiliated with the Company's radio networks and the Company
purchases several programs from Infinity. During 1999, the Company incurred
expenses aggregating approximately $70,241,000 for the Representation Agreement
and Infinity affiliations and programs. The Company currently anticipates that
it will continue to have such arrangements with Infinity and its radio stations
in the future. The Management Agreement provides that all transactions between
the Company and Infinity or its affiliates will be on a basis that is at least
as favorable to the Company as if the transaction were entered into with an
independent third party. In addition, all agreements between the Company and
Infinity or any of its affiliates must be approved by the Board of Directors.
11
<PAGE>
In October 1996, Metro entered into a Stock Loan and Pledge Agreement with
Mr. Saperstein pursuant to which Metro loaned Mr. Saperstein 3,824,625 shares of
Metro common stock. The Company assumed this agreement as part of its merger
with Metro. The loan was for a term of seven years, although the Company had the
right to require the return of the loaned Common Stock (the "Loaned Stock") from
Mr. Saperstein prior to that time upon three days notice. As security for the
loan, Mr. Saperstein pledged a number of shares of Series A Convertible
Preferred Stock of the Company which when converted into Common Stock would have
equaled the number of shares of Loaned Stock. Mr. Saperstein repaid the loan in
December 1999. In addition, Mr. Saperstein had outstanding receivable balances
with the Company which at one-time aggregated $930,000. No amounts were owed the
Company on December 31, 1999.
Mr. Lerman has been a member of the Washington, D.C. law firm of Leventhal,
Senter and Lerman, PLLC since 1986. From time to time, the Company engages
Leventhal, Senter and Lerman, PLLC in certain matters.
Compliance with Section 16(a) of the Exchange Act
- -------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Executive officers,
directors and more than ten percent shareholders are required by Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from its directors and executive officers, the Company
believes that during 1999 its executive officers, directors and more than ten
percent beneficial owners complied with all filing requirements applicable to
them.
SELECTION OF INDEPENDENT ACCOUNTANTS
------------------------------------
Action will be taken at the Annual Meeting to ratify the selection of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
fiscal year ending December 31, 2000. PricewaterhouseCoopers LLP has been the
independent accountants of the Company since 1984. The Company knows of no
direct or material indirect financial interest of PricewaterhouseCoopers LLP in
the Company or of any connection of that firm with the Company in the capacity
of promoter, underwriter, voting trustee, officer or employee. Members of
PricewaterhouseCoopers LLP will be present at the Annual Meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO RATIFY THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP. THE AFFIRMATIVE VOTE OF A MAJORITY OF
THE COMMON STOCK AND CLASS B STOCK, VOTING TOGETHER, PRESENT OR REPRESENTED AT
THE ANNUAL MEETING IS REQUIRED TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS
LLP.
12
<PAGE>
SOLICITATION
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the accompanying proxy card will be borne by the Company. The
Company has requested banks and brokers to solicit their customers who are
beneficial owners of Common Stock listed of record in the names of the banks and
brokers, and will reimburse these banks and brokers for the reasonable
out-of-pocket expenses of their solicitations. The original solicitation of
proxies by mail may be supplemented by telephone, telegram and personal
solicitation by officers and other regular employees of the Company, but no
additional compensation will be paid on account of these additional activities.
SHAREHOLDER PROPOSALS FOR 2000
Under the rules of the Securities and Exchange Commission, any shareholder
proposal intended for inclusion in the proxy material for the Annual Meeting of
Shareholders to be held in 2001 must be received by the Company by December 31,
2000 to be eligible for inclusion in such proxy material. Proposals should be
addressed to Farid Suleman, Secretary, Westwood One, Inc., 40 West 57th Street,
5th Floor, New York, NY 10019. Proposals must comply with the proxy rules of the
Securities and Exchange Commission relating to stockholder proposals in order to
be included in the proxy materials. Additionally, management proxy holders for
the Company's 2001 Annual Meeting of Shareholders will have discretionary
authority to vote on any shareholder proposal that is presented at such Annual
Meeting but that is not included in the Company's Proxy materials, unless notice
of such proposal is received by the Secretary of the Company on or before March
30, 2001.
By Order of the Board of Directors
Farid Suleman
Secretary
Culver City, California
April 28, 2000
13
<PAGE>
Appendix A
PROXY
WESTWOOD ONE, INC.
Proxy for 2000 Annual Meeting of Shareholders for Holders of Common Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WESTWOOD ONE, INC.
The undersigned shareholder of Westwood One, Inc., a Delaware
corporation (the "Company"), hereby appoints Farid Suleman and Gary J. Yusko as
the undersigned's proxies, each with full power of substitution to attend and
act for the undersigned at the Annual Meeting of Shareholders of the Company to
be held on June 15, 2000 at 10:00 a.m., Pacific Time, at W Los Angeles,
930 Hilgard Avenue, Los Angeles, California and any adjournments thereof, and to
represent and vote as designated on the reverse side all of the shares of Common
Stock of the Company that the undersigned would be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy, the
proxies are authorized to vote in accordance with their best judgments.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
- ----------- -----------
SIDE SIDE
A-1
<PAGE>
X Please mark votes as in this example.
-----
The proxies present at the Annual Meeting, either in person or by substitute (or
if only one shall be present and act, then that one), shall vote the shares
represented by this proxy in the manner indicated below by the shareholder. IF
NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON THIS PROXY, IT WILL BE VOTED
FOR ITEMS 1 AND 2 SHOWN BELOW. The Board of Directors recommends a vote FOR
all nominees in Item 1 and FOR Item 2.
1. Election of Class II Directors.
Nominees: Farid Suleman, David Dennis and Maria D. Hummer
----- FOR ALL NOMINEES ----- WITHHELD FROM ALL NOMINEES
----- FOR ALL NOMINEES EXCEPT AS NOTED ABOVE (to withhold authority
for a Director nominee strike out such nominees name)
2. Ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the fiscal year ending
December 31, 2000.
FOR AGAINST ABSTAIN
----- ----- -----
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
-----
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IMPORTANT: In signing this proxy, please sign your
name or names on the signature line in the same way
as indicated on this proxy. When signing as an
attorney, executor, administrator, trustee or
guardian, please give your full title as such.
EACH JOINT OWNER MUST SIGN.
Signature: Date: Signature: Date:
------------- ------- ------------- -------
A-2
<PAGE>
PROXY
WESTWOOD ONE, INC.
Proxy for 2000 Annual Meeting of Shareholders for Holders of Class B Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WESTWOOD ONE, INC.
The undersigned shareholder of Westwood One, Inc., a Delaware corporation
(the "Company"), hereby appoints Farid Suleman and Gary J. Yusko as the
undersigned's proxies, each with full power of substitution to attend and act
for the undersigned at the Annual Meeting of Shareholders of the Company to be
held on June 15, 2000 at 10:00 a.m., Pacific Time, at W Los Angeles, 930
Hilgard Avenue, Los Angeles, California and any adjournments thereof, and to
represent and vote as designated on the reverse side all of the shares of Class
B Stock of the Company that the undersigned would be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy, the
proxies are authorized to vote in accordance with their best judgments.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
- ----------- -----------
SIDE SIDE
A-3
<PAGE>
X Please mark votes as in this example.
-----
The proxies present at the Annual Meeting, either in person or by substitute (or
if only one shall be present and act, then that one), shall vote the shares
represented by this proxy in the manner indicated below by the shareholder. IF
NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON THIS PROXY, IT WILL BE VOTED
FOR ITEMS 1 AND 2 SHOWN BELOW. The Board of Directors recommends a vote FOR
the nominee in Item 1 and FOR Item 2.
1. Election of Class II Director.
Nominee: Farid Suleman
----- FOR THE NOMINEE ----- WITHHOLD FROM NOMINEE
2. Ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the fiscal year ending
December 31, 2000.
FOR AGAINST ABSTAIN
----- ----- -----
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
-----
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IMPORTANT: In signing this proxy, please sign your
name or names on the signature line in the same ways
as indicated on this proxy. When signing as an
attorney, executor, administrator, trustee or
guardian, please give your full title as such.
EACH JOINT OWNER MUST SIGN.
Signature: Date: Signature: Date:
------------- ------- ------------- -------
A-4
